As the title suggests, the article outlines how AT&T is suffering from poor – and in some cases, undue and inaccurate — perceptions. The author, Randall Stross, reports on independent research which indicates AT&T’s 3G coverage is better than Verizon’s. He also reveals that some of the problems users experience with the iPhone are a result of iPhone design flaws, not of AT&T’s coverage, or lack thereof. Stross concludes, “AT&T, while meeting 4,000 percent growth in data use, has acquitted itself quite nicely. But the company is saddled with an awful public image as the perennial laggard.”

This prompted a few observations and insights on the topic of “perception is reality.” “Perception is reality” is not a new thought, of course — remember those old Rolling Stone magazine Perception/Reality ads?! But there are a few specific dynamics in the AT&T/iPhone/Verizon situation that add insight to the adage:

1. Consumers’ perceptions are shaped by the things they care about most.

AT&T may indeed have faster download speeds and stronger signals but, if my understanding of the technology is correct, these are benefits experienced primarily when using mobile apps or the Internet browser. They have less impact when using the phone to make calls – and that’s what people care about most (for now).

When a call is dropped, it’s a problem:
– it causes a clear disruption — one instant you’re communicating, the next you’re not
– that disruption impacts 2 people – you and the (in some cases very important) person you’re talking to
– and it requires a messy recovery – first, you have to realize the call was dropped (how many of us have continued talking on and on until we realize the other person isn’t there anymore?!); then, you have to hang up and wait for your phone to reset; then you have to redial (which often involves you getting the other person’s voicemail because they’re trying to call you back at the same time and you play several rounds of dialing/getting voicemail/hanging up/waiting for the other person to call you/deciding you’ve waited long enough and maybe the other person isn’t calling you after all/dialing again, etc.); and then finally, when you do get the other person back on the line, you have to exchange apologies and explanations and figure out where the conversation left off before you can resume it

It’s a pain. When a mobile app doesn’t work, you just refresh or hit “enter” again and it usually works just fine. Very little hassle; very little lost time.

So, people care a lot more about reliable voice service than about reliable data service (again, for now). As such, AT&T’s poorer quality of voice service has shaped people’s perceptions of the brand far more than their superior data service.

The point for brands: It doesn’t matter how good you are at something if you’re not good at the thing people care about most. Both product development and marketing need to be focused on consumers’ primary drivers.

2. Perceptions are also shaped by people’s expectations.

Mobile phones are a mainstream category and making calls on mobile phones is an established behavior. As such, people expect to use their mobile phones to make calls without incident.

Mobile apps and other data-based usage of phones, on the other hand, is still a new phenomenon. People are just discovering what is possible and so they generally have low expectations. If something doesn’t work the way they think it should, most people are likely to chalk it up to the new-ness of the technology. And, really, they’re no worse off than they were 6 months ago when they didn’t even have the thought of doing what they’re trying to do.

People’s perceptions of AT&T and Verizon are based on their expectations of seamless phone calling service – so again, AT&T suffers from poor perceptions.

The point for brands: While perceptions may be hard to change, expectations are more easily shaped. Brands can advance people’s expectations or focus them in a particular direction. Brands can position themselves as an advocate for a higher standard of performance, and improve perceptions of their own performance in the process (think Target and its “Expect More. Pay Less.” platform.)

3. Perceptions of a particular product or feature are shaped by overall brand perceptions.

The NYT piece reports that Roger Entner, SVP for telecommunications research at Nielsen, explains although the iPhone’s design has “shortcomings that ‘affect both voice and data…’” in the eyes of the consumer, “the iPhone has the nimbus of infallibility, ergo, it’s AT&T’s fault.” This might seem unfair, but from the very beginning of AT&T’s partnership with Apple/iPhone, it’s been clear AT&T had more to gain.

A few years ago AT&T was working hard to shed its old “Ma Bell” image and compete more visibly in mobile communications. The new iPhone with all its bells and whistles and Apple’s powerful brand image provided an avenue for AT&T to move its brand forward. A 2007 press release reporting on the launch stated, “During the past several months, AT&T has been strategically transforming the brand into one that is mobility-centric. The company kicked efforts into high gear in early May to prepare for…the iPhone. The accelerated push…took the company’s branding initiatives to the next level.”

While the effectiveness of these efforts may be debated by some, the fact is AT&T started out from a weaker position and continues to suffer because of it. Its service quality may indeed be high, but perceptions of the brand overall continue to hold it back. Promoting speeds and feeds has limited impact; advancing a platform of brand value which resonates with consumers’ values and emotions would do so much more.

The point for brands: Specific improvements in your offering go hand-in-hand with improvements in overall brand perceptions. Product improvements will not make an impact if they’re not connected to the brand. And, attempts to improve brand perceptions without tangible evidence of change will fail. But together they are a powerful combination. In product development and promotion, specific changes need to be tied to the overall brand value.

OK, I think I’ll give the mobile category a break for now – but I appreciate the comments from my last post and hope to hear from you on this one.

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